Asia Markets recap: Trading in Ukraine\’s shadow

March 3, 2014, 6:51 PM ET

Shutterstock/And Inc.

Welcome to the Asia Markets live blog, a running account of what the region’s stock markets are doing, along with other news. Today, shares trade mixed but mostly outperform the previous session, even as the Ukrainian conflict continues to loom over the markets. Meanwhile, Australia\’s central bank leaves rates alone but resumes its talking-down of the currency.

The spiraling conflict in Ukraine is a big theme in global equities today, and while Sydney is not completely immune, the S&P/ASX 200 is nonetheless up 0.1%, having booked its losses yesterday.

The major miners are helping support the market in the early going (BHP Billiton up 0.4%, Rio Tinto up 0.7%, Fortescue up 1.5%) and the top financials have reversed early losses to likewise move higher (NAB and Macquarie up 0.3% each, CBA up 0.4%, Westpac up 0.3%).

Meanwhile, after the government said it would try to amend the Qantas Sale Act and allow higher foreign investment in the airline, Qantas is … doing little: trading flat after flirting with small gains.

AGL Energy is down 2.3% after regulators decided to block its purchase of some government power assets, but Graincorp is 1.2% higher amid forecasts that the drought in eastern Australia will eat into crop output.

Also lower are the gold miners. Even though the precious metal saw strong gains overnight, the gold stocks appear to have already gotten the rally out of their system yesterday (when, for example, St. Barbara ended the previous session with an gain of more than 11%). Today, it’s Newcrest down 1.6%, Kingsgate down 3.4% and St. Barbara flat.

Later today, the Reserve Bank of Australia is due to hand down its policy decision, and it’s widely expected to be a snoozer. With the RBA having promised a period interest-rate stability in its last statement, a rocking-shocking rate move seems highly unlikely, and even the central bank’s language may well remain unchanged.

As the yen catches a bid on safe-haven buying associated with the Ukrainian conflict, as exporters repatriate a record amount of overseas income (at least according to a Nikkei report this morning), so too do Japanese stocks move lower.

Currently, the Nikkei Average is down 0.2%, though off its opening deficit of 0.7%, while the Topix is flat.

With the dollar holding around a one-month low against its Japanese rival — currently buying ¥101.48 — the blue-chip exporters are taking on further losses in early trade. Nidec is down 2.9%, Sony is down 1.7%, TDK is down 1.6%, and so on. (On the other hand, Panasonic is up 0.6%, keeping to its mostly winning ways ever since reports surfaced it may help build Tesla’s U.S. “Gigafactory.”)

Auto shares are also lower, with Toyota Motor and Honda Motor down 0.5% and 0.9%, respectively, after both posted losses in their North American car sales overnight, blamed on the bad weather in February. But Nissan, which saw a forecast-busting rise of almost 16% in its sales, is down 0.4% all the same.

On the upside, Takeda Pharmaceutical is 0.5% higher after admitting some of its previous hypertension-drug ads were “inappropriate,” but that they didn’t outright lie or break the law.

And some real-estate shares are doing well, with Mitsui Fudosan up 1.3%, Sumitomo Realty & Development up 1.6%, and Mitsubishi Estate up 2.2%. The advance coincides with a feature in the Nikkei Asian Review arguing that the property market could soon gain in tandem with a recent rise in Tokyo’s commercial real estate.

Last, and perhaps least, tea-maker Ito En is down 5.3% after revealing a fiscal-third-quarter net profit roughly two-third lower than what it was a year earlier.

Slowly, persistently, Japanese stocks have slogged back uphill and into positive territory, with the dollar-yen rate rising in tandem (at ¥102.68 vs. ¥101.48 early in the session).

At this point, the Nikkei Average is up 0.6%, having started down 0.7%, while the Topix is 0.8% higher.

Some of the tech exporters have helped lead the turnaround, with NEC up 2.7%, Renesas Electronics up 3.4%, and Nintendo up 2.5%. On the other hand, industrial Nidec is still down 2.9% — it’s not clear why, though the firm said in a U.S. filing that it has yet to buy any shares under its stock-buyback program launched in late January.

Retailers have also swung to some solid gains: Aeon is up 2.2%, J.Front is up 2.1%, and Seven & I is up 3%. Fast Retailing, though up 0.9%, is underperforming its peers after posting a 0.8% rise for its Uniqlo chain February sales in Japan, a sharp slowing from January’s 15% jump. This, as Fast is reportedly in talks to buy U.S. rival J. Crew.

Jittery investors in Hong Kong sent stocks on a tentative advance, with investors watching the start of the nation’s annual legislative session. (China’s legislature convenes tomorrow, while a parallel consultative body began its meeting Monday.)

The Hang Seng Index rebounded by 0.4% after heavy sell-off in the previous session on Ukraine turmoil, though Hong Kong’s H-share index was fractionally lower.

The country’s largest refiner — China Petroleum & Chemical Corporation, or “Sinopec” — climbed 1% as the company’s chairman said the firm would announce more details about the restructuring of its retail unit during the legislative session.

Other stocks in the oil sector also attracted buyers, with top oil producer PetroChina rising 0.9%, and Cnooc, the biggest offshore oil company, up 0.5%.

Internet giant Tencent Holdings climbed 1.3% as news reports said it planned to buy a stake in one of China’s largest online video companies, Youku Tudou. Fellow online player Forgame Holdings surged 8.5% after the web-game developer invested $70 million for a stake in Hong Kong peer Magic Feature.

But despite the gains in Hong Kong, the Shanghai market dropped after its rally in the previous session, with the Shanghai Composite Index down 0.7% at 2,061.66.

The Reserve Bank has spoken, and Australia’s cash rate is still 2.5% — no surprises there.

As for the accompanying statement from Gov. Glenn Stevens, the really important part remained word-for-word what it was at the last meeting on Feb. 4:

“In the Board’s judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.”

What did change, though, was a return of previous complaints about the Australian dollar being overvalued, at least in the eyes of the RBA. Compare for yourself…

Today’s statement: “The decline in the exchange rate seen to date will assist in achieving balanced growth in the economy, though the exchange rate remains high by historical standards.”

So I guess that decline wasn’t sustained. But at least Stevens and friends can take consolation in the fact that today’s comments were successful in talking down the Aussie dollar, albeit by a small amount. Some 15 minutes after the decision, the Australian dollar is buying 89.15 U.S. cents, down from 89.48 U.S. cents just before the announcement.

Stocks were unmoved, however, with the ASX 200 up 0.3%, just as it was ahead of the RBA call.

The once-a-year meeting of China’s legislature — the National People’s Congress — begins Wednesday, and it will likely make news, all the more so this year, as it follows the Communist Party’s big reform plenum reform late last year.

The Hang Seng Index rebounded at the opening after sell-off in the prior session, and widened its gains after reports said Russia has ordered its troops that were on exercise in western and central Russia to return to their bases, easing investors’ fear on a possible war between Russia and Ukraine. The index closed 0.7% higher to 22,657.63.

Cheung Kong (Holdings), Hong Kong tycoon Li Ka-shing’s property development company, rallied 2.4%, after several investment banks raised its target price and put it on their conviction buying lists. The company on Friday posted a 10% net profit growth for 2013.

Hutchison Whampoa, another conglomerate of Li, also climbed 3.2%.

However, Shanghai markets were a bit volatile before China’s most important political event of the year — the annual meeting of National People’s Congress — starts on Wednesday. The Shanghai Composite slipped 0.2% to 2,071.47.

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